8 CRM Trends and Predictions

The experts say the cloud, AI and in-store capabilities will be important for customer relationship management software this year.

What’s going on in CRM? What are the big trends that appeared in 2016 and what can we expect in 2017?

1. Old Guard Losing Ground

The latest stats from Gartner show the continuation of a trend — the old guard losing ground. Once upon a time, Siebel was the big name in CRM. Oracle purchased the company, and less than a decade ago, it was one of the dominant forces in CRM along with the likes of IBM and SAP. Yet now, these companies account for less than 20 percent of overall market share.

A host of companies have been munching away at these legacy providers' share of the pie. Salesforce alone now owns almost 20 percent of the $26.3 billion worldwide CRM software revenue, according to Julian Poulter, an analyst at Gartner.

2. Cloud and SaaS Reign Supreme

Clearly, cloud-based CRM has won the day over on-prem. Those vendors that clung to on-premises solutions the longest have faltered. A raft of software as a service (SaaS) startups have rushed in and gained ground.

"CRM growth is driven by cloud service revenue, which, in the application space, uses SaaS as the major delivery model," said Poulter. "SaaS revenue grew 27 percent year over year, which is more than double overall CRM market growth in 2015. On-premises new license revenue declined 1 percent for the same period."

3. Merger Mania

Even though the market for CRM software is quite splintered, consolidation is afoot. Larger firms are gradually acquiring the many SaaS CRM startups.

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"The merger and acquisition activity that began flowing through the market in 2009 continued in 2015, with more than 30 notable acquisitions,” said Poulter. "This has resulted in increased competition at the top end of the CRM market."

4. AI Incursion

It’s no surprise that Salesforce believes artificial intelligence (AI) is the biggest trend in CRM. After all, it launched Salesforce Einstein a couple of months ago. By embedding AI into the core of the Salesforce Platform, the company hopes to deliver more predictive and personalized customer experiences across sales, service, marketing and commerce.

The company touted the following benefits:

Sales reps receive guidance on next steps and can predict which opportunities are most likely to close, as well as getting recommendations on actions to take to close the deal.

Service reps gain assistance on every case and can deliver proactive service by resolving issues faster and more accurately.

Marketing can create predictive journeys and personalize experiences like never before.

IT can embed intelligence everywhere and create smarter apps for employees and customers.

“Over the next year, we will see the democratization of intelligence as AI is embedded into every facet of the enterprise — starting with enterprise apps,” said Jim Sinai, vice president of marketing, Salesforce Einstein. “As customer expectations reach an all-time high, every employee and business process will be powered by intelligence in order to deliver more productive, predictive and personalized customer experiences.”

5. Focus on the Customer Experience

Angela Bandlow, senior director, product marketing, Microsoft Dynamics 365, has noticed more brands than ever aligning their overall strategy to the customer experience. That means no longer using CRM as a system of record, but breaking down the silos between departments — sales, customer service and marketing — to start learning about and achieving a 360-degree view of their customers.

“For companies heavily reliant on CRM, it’s time to take a step back and really look if they’re using their current CRM solution to its full potential,” she said. “Be proactive in advocating and instigating change.”

6. Retail Visibility

The retail space has gotten so competitive that minutes matter. With Amazon and their ilk using real-time analytics to boost sales, the retail industry has been upping its game to compete. With access to key data, retailers can take advantage of trends by tying them to generational groups. For example, knowing and understanding generational groups are important for any market initiative. This strategy will outline the desired customer behavior needed to support and influence trends with the intention of reaching specific generational groups and ramping up business loyalty.

“Retail businesses want access to faster, more in-depth visibility to data and reporting, as well as key market trends and the ability to react to customers,” said Doug Smith, director of product marketing, retail and distribution, Epicor Software. “Providing retailers with a new level of flexibility in their technology solution enables them to improve rewards for their customer base. With access to better data, they can better measure, monitor and manage the customer experience.”

7. CRM Ubiquity

Instead of CRM being the province of a few in sales or marketing, or just the sales team, Smith has observed a trend towards spreading the wealth. As consumers have access to so much information online, they expect retail employees to have access to the same level of detail, if not more. That means far more employees and sales touchpoints, such as store managers at even small retail outlets, want to tap into CRM and analytics to boost sales.

“Retailers will need to mobilize the sales team more than ever to empower associates with information to meet customer expectations for knowledgeable service,” said Smith. “Consumers will still shop locations to see, touch, and investigate items they need to buy, but will also expect a complimentary digital experience, and retailers will need to be able to deliver seamless omni-channel capabilities.”

8. In-Store CRM

Amazon excepted, the retail world continues to rely on in-store sales.

“Stores are still the bulk of most retailers’ revenue and they can’t lose focus on this,” said Will Stephenson, CRM senior principal solution consultant at Aptos. “Retailers continue to stress customer experience as a key differentiator, but need to be able to monetize it not only at the customer level, but also the store and associate.”

This means using CRM to ensure customer communication at store level is frequent, relevant and measured. The tried-and-true adage ‘what gets measured, gets improved’ is very relevant here. Many retailers still do not know the value of an e-blast for brick and mortar, the value of in-store events and the halo effect associated with each. Thus, look for more and more retailers investing in high-touch methods to communicate with their customers. This used to be the domain of higher-priced retailers, but it will continue to drive down to mid- and lower-priced retailers. As the customer continues to become less brand aware, those retailers who excel in personalized communication and service will win.

Drew Robb is a freelance writer specializing in technology and engineering. Currently living in Florida, he is originally from Scotland, where he received a degree in geology and geography from the University of Strathclyde. He is the author of Server Disk Management in a Windows Environment (CRC Press).

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